A man surnamed Li pawned his 200-square-meter apartment worth over one million yuan near Beijing Capital Airport for 800,000 yuan (US$102,600) so he could invest in the stock market. He then pawned his stocks for 700,000 yuan and bought more stocks.

High-risk investment or reckless gamble? Either way, this strategy is becoming increasingly popular among the Chinese capital's speculators.

"Our client, Mr Li, had initially bought the apartment for property investment but, without a suitable buyer, he turned to stock investment," said Yang Jingkun, assistant manager of Beijing Huaxia Pawnshop.

"Every month around 10 stock investors mortgage their apartments for 600,000 yuan to 700,000 yuan in our pawnshop," saidYan Xingnong, general manager of Minsheng Pawn broking Co., in Beijing.

"One of them pawned three luxury apartments for a total of three million yuan," Yan said.

Beijingers pawned their apartments for a total of 1.5 billion yuan (192 million U.S. dollars) last year and most of the money was poured into the stock market, according to China Securities Journal.

Considering the size of the returns, the risk appears huge. Pawnshops in Beijing offer loans worth 70 percent of the value of an apartment and charge a monthly interest rate of 3.2 percent. Ifan investor pawns an apartment worth one million yuan and his stocks yield a 50-percent profit, then he or she will still only earn 81,200 yuan a year.

But the Chinese mainland's bullish stock market is attracting investors in their droves.

A BMW owner who twice pawned his car for 200,000 yuan, with a monthly interest rate of 4.7 percent, in the Jinbao Pawnshop in Beijing boasted that his stocks had yielded a 20-percent gain.

Another stock investor surnamed Zhang pawned the stocks he held in Huaxia and invested the money in other stocks that he believed would rise quickly. "The newly-purchased stocks have reached the daily raise limit of 10 percent," he said proudly.

Pawnshops in the capital city give loans worth 70 percent to 80 percent of the market value of stocks and charge a monthly management fee of around two percent. The loan may be as much as 100 percent of the market value when it comes to the lucrative blue chip stocks.

"In the past stock investors running short of cash pawned their stocks in the hope of making up losses, but now they do so in pursuit of bigger profits," said an anonymous clerk with Huaxia.

Beijingers are not alone. The number of speculators using pawn shops was 30 percent higher than usual at the beginning of the year in east China's cities of Shanghai, Hangzhou and Nanjing, forcing pawnshops to reduce their loan offers.

For example, an apartment worth one million yuan could be pawned for 750,000 yuan last year in Hangzhou, but now it can only fetch 600,000 yuan.

"Pawnshops attract a lot of stock investors because applying for loans from pawnshops does not involve going through the complicated and time-consuming formalities found in banks," said Guo Jinshan, President of the Beijing Pawn Trade Association (BPTA).

Since the Chinese government took measures - including imposing higher taxes on the transfer of housing ownership - to rein in speculation on the property market last year, more and more investors have turned to the bullish stock market.

The number of accounts in the mainland's two bourses rose 132,119 on January 9 to 789.23 million when the market value of the Chinese stocks hit a record 10.25 trillion yuan.

"Although most of the investors who are pawning their apartments have two or three properties, they are exposing themselves to high risks in the pursuit of high returns," said Lu Xiaoping, an analyst with Founder Securities Co. Ltd.

The bullish stock market has given pawnbrokers a wealth of opportunities to rake in higher profits, but many remain wary of the risks to which they themselves are exposed.

"When a stock investor that pawned his only apartment loses and fails to repay the mortgage in the agreed time, the pawnshop also runs into the trouble of trying to repossess his apartment," said Hao Fengqin, BPTA secretary-general.

"In Shanghai, many pawnshops have refused to give loans to people trying to pawn their apartments", she added.

"Stock investors should take a rational approach and be cautious about investing their lifelong savings because it is so hard to predict when stocks will depreciate in the risky market," she said.